Insurance Brokers and Agencies in the US Industry Market Research Report from IBISWorld Has Been Updated

The industry will face considerable pricing pressure from competitors like online carriers, which will keep profit margins from fully recovering to prerecession levels. For these reasons, industry research firm IBISWorld has updated a report on the Insurance Brokers and Agencies industry in its growing industry report collection.

Agencies will rely on rising homeownership and falling unemployment for solid growth.

New York, NY (PRWEB) March 31, 2014

As a vital part of the insurance sector, the Insurance Brokers and Agencies industry experienced subdued growth over the five years to 2014 due to tempered disposable income levels and delayed purchases of homes and consumer durables. “The industry includes independent firms that act as intermediaries during insurance purchases,” according to IBISWorld Industry Analyst Stephen Hoopes. The majority of the industry's income is associated with commissions from insurance transactions, so revenue depends on three factors: policy pricing, demand for insurance and the popularity of using agents and brokers as channels for distributing and purchasing insurance.

Over the five years to 2014, the industry has faced increased competition from underwriters that provide insurance services directly to clients. These companies have looked to reduce their reliance on independent brokerages and agencies by expanding their sales abilities through investing in company-owned sales websites and diversifying their sales divisions. “To counteract this trend, brokers and agents have positioned themselves as insurance advisory service experts,” says Hoopes. Industry operators now emphasize their ability to provide risk management and insurance consulting services, rather than just acting as liaisons during the insurance transaction process. This trend is pushing companies to hire more skilled employees in order to offer advanced services that will complement insurance sales.

Over the five years to 2014, industry revenue is expected to grow at an annualized rate of 0.8% to $135.1 billion. This muted growth has been caused by strong transaction activity being offset by weak insurance premium prices, a result of the soft cycle that the primary insurance market has been in the midst of since 2008. The industry's recovery took longer than expected, but rebounded substantially since 2012, with estimated growth of 3.1% in 2014 alone.

Over the five years to 2019, the industry is anticipated to grow significantly as the economy improves. Such factors will drive increases in insurance demand that will stimulate commissions for industry operators. However, the industry will face considerable pricing pressure from competitors like online carriers, which will keep profit margins from fully recovering to prerecession levels.

For more information, visit IBISWorld’s Insurance Brokers and Agencies in the US industry report page.

The Insurance Brokers and Agencies industry includes individuals and businesses that primarily act as agents or brokers in selling insurance policies and annuities. Industry participants earn commission income, mostly as a percentage of the premium of insurance policies sold. They also earn some fee income for providing risk management consulting and other value-added services. This industry is only composed of independent brokers and agencies.

About IBISWorld Inc.
Recognized as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every US industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Los Angeles, IBISWorld serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.